Unfortunately, it appears that Santa Claus and his reindeer might fall a bit behind this year. Due to the COVID-19 pandemic creating shutdowns and shipping jams at seaports, factories, and retail stores over the past year, many toy manufacturers are concerned about delays in their products reaching customers this Christmas.

A majority of toys are manufactured in and shipped from China, where long shipping delays have been occurring. Prices for shipping containers to arrived to the United States' West Coast have inflated significantly. The Freightos Baltic Index tracks shipping surcharges and found that compared to last summer, shipping costs have gone up almost $16,000.

Companies like Hasbro have gotten creative when it comes to sourcing their toys. Instead of relying on Chinese manufacturing, sourcing experts have been reaching out to other countries to locate product. Mattel has also been exploring new options when it comes to sourcing their products.

Despite the COVID-19 pandemic ravaging most industries in 2020, the toy manufacturing industry saw a 16 percent growth. This is most likely due to parents purchasing toys for their children due to the fact that they couldn't attend traditional school settings, go on playdates, or even go to playgrounds.

Most toy companies make the bulk of their profit during the fourth quarter of the fiscal year, which falls around Christmas time. Products that are made in July can usually reach the United States by August, which allows for products to hit the shelves by October. Currently, bidding wars are occurring to see which manufacturers get space on shipping containers arriving to the United States from China.

For many toy retailers, if their products haven't left Chinese ports by August 15th, it is highly unlikely that the product will make it to the United States until 2022. Labor and raw material costs have also risen 20 percent, which means it's costlier for retailers to even have their toys made in China.

MGA Entertainment, the company that owns Little Tikes and LOL Surprise dolls, had to raise their prices to compete with costs rising both at home and overseas. Regardless of the current shipping issues from Chinese ports, most companies will not be moving their operations out of China. This is because China already has the factories and logistics systems in place to move product across the ocean. The slow processing times could happen from any country, solely because product has to move many miles during an unusual time.